Acacia Mining says Tanzania audit inaccurate, considers options

Reuters Staff

2 Min Read

* Acacia shares have tumbled by 40 pct since Wednesday

* Says govt findings contain “significant discrepancies”

By Zandi Shabalala

LONDON, May 26 (Reuters) - Acacia Mining hit back at the Tanzanian government on Friday, describing the state’s audit of the company’s gold and copper ore as inaccurate and saying it would consider its options in the East African state.

The government’s fraught relationship with the mining sector, having banned the export of all unprocessed ore in March, reached a nadir this week when Tanzania President John Magufuli sacked the mining minister and the chief of the state-run mineral audit agency on Wednesday.

That followed an investigation that Magufuli said had found 10 times more gold in Acacia’s containers than the company had declared, as well as undeclared minerals such as iron and sulphur.

“We do not understand the findings of the (investigation) committee and believe that they contain significant discrepancies compared to all previous data analysed,” Acacia said in a statement on Friday.

Magufuli, nicknamed The Bulldozer for his propensity to push projects through, launched a crackdown on corruption shortly after taking office in 2015.

Acacia’s shares have plunged nearly 40 percent since Wednesday. They clawed back a little of that on Friday, gaining 1.9 percent to 271 pence by 1303 GMT.

The company, majority owned by Barrick Gold and Tanzania’s biggest gold miner, said that it would consider its options after its latest problems in Tanzania.

Acacia said that the 250,000 ounces of gold that the audit was said to have found in containers from its Bulyanhulu and Buzwagi mines implied that the two operations produced 1.5 million ounces of gold a year, which would make them the two largest producers in the world.

The company also said it does not receive revenue for the other minerals the audit said it had failed to declare.